Supporting Good Governance

in the Pacifc
The Pacifc development landscape
Developing countries in the Pacifc face signifcant
challenges, including sound macroeconomic management
and sustained economic growth. Growth and expenditure
trends rely heavily on debt and aid, and the majority
of countries were consistently in fscal and trade defcit
positions during the study period (20002010). In some, the
public sector dominates the economy. Increasing hardship
is a concern and available indicators for the Millennium
Development Goals suggest that many of the 2015 targets
will be missed.
Development aid receipts to the Pacifc have grown
steadily, including for governance, while there has been
a proliferation of entities engaged in various areas of
development (Figure 1 and Table 1). In nominal terms,
annual ofcial development assistance (ODA) is estimated to
have doubled to over $1.4 billion from 2002 to 2009. In real
terms, ODA grew an annual average of 3% in the period.
There are more bilateral, multilateral, regional,
nongovernmental, and other players working in Pacifc
developing member countries than ever before. This brings
new opportunities and resources for development, but
also raises the risk of duplication and inefciency. There
is, nonetheless, strong recognition of the need for better
coordination. For ADB, the implications of more aid from
more providers underscores the need to strengthen working
partnerships, leverage limited resources, and focus on
comparative advantages.
Good governance and sound public sector management matter to development. It is widely agreed that
better governed countries will likely make better development progress than poorly governed countries.
In the majority of ADB developing member countries in the Pacifc, progress is sluggish on social and
economic development objectives, including the Millennium Development Goals. While all Pacifc
governments have committed to improving governance, and ADB and other development partners
continue to provide support, there remain key concerns in issues of capacity, implementation, and
enforcement.
In a 2011 special evaluation study, the Independent Evaluation Department explored governance and
development in the Pacifc, assessed ADBs support for governance and public sector management in the
past decade, and presented lessons and recommendations.
Figure 1: Ofcial Development Assistance (ODA) to
Pacifc DMCs, 20022009 ($ million, nominal)
87.5
167.0
223.9
298.3
342.6
411.2 415.2
358.1
743.4
843.4
874.9
1,102.0
1,174.0
1,306.1
1,376.4
1,417.0
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2002 2003 2004 2005 2006 2007 2008 2009
$
m
i
l
l
i
o
n
Year
PSM/governance rel ated ODA categori es Total ODA di sbursements to Paci fi c DMCs
$

m
i
l
l
i
o
n
public sector management/governance related ODA categories
total ODA disbursements to Pacifc developing member countries
June 2012
Learning Lessons
Evaluation
Independent
Committing to better governance
All Pacifc governments have pledged to strengthen
governance. In its review of their development strategies,
the evaluation found clear and explicit commitments to
strengthening governance and public sector management.
Yet, the policies, institutions, and measures in place to
uphold good governance and accountability vary across the
countries. Good governance has also become a salient topic
at the regional level. Since the mid-1990s, Pacifc leaders have
adopted numerous regional plans committing to stronger
governance and public sector management.
Governance assessments and indicators, including World
Bank governance ratings and ADB Country Performance
Assessment ratings, paint a mixed picture, but generally
suggest continued weakness across the Pacifc on key
dimensions of governance.
At the same time, there remains concern that many
governments do not have the capacity to implement
measures, that key institutions are weak, and that
enforcement and implementation are insufcient. It is clear
that the key institutions needed for good governance and
accountability will need to be strengthened if those areas are
to improve.

Defning and supporting governance
ADB identifes governance as a key driver of change and
defnes it as the manner in which power is exercised in the
management of a countrys economic and social resources
for development. Its support for governance is channeled
mostly through projects classifed under public sector
management, with some governance support channeled
through projects in other sectors that have governance as a
thematic classifcation.
ADBs Pacifc strategy has evolved to emphasize growth,
institution building, participatory approaches, and private
sector development. ADBs portfolio of support for
governance and public sector management in the Pacifc
has covered a wide range of areas and interventions,
including public fnancial management, economic and
social assessments, development planning, statistics, legal
sector reforms, and civil service reforms. The ADB Pacifc
Departments 2007 midterm review of the Pacifc Strategy
20052009 revealed that improvements in political stability
and good governance were needed to achieve good returns
on public and private investment. As such, refnements to
the strategy were envisaged to focus greater attention
on governance.
From 2000 to 2010 for the Pacifc, ADB approved
$158 million for 10 loans and grants, and $42 million
Table 1: Top Ofcial Development Assistance Providers by 20082009 Average Gross Disbursements
(in descending order per country)
COO FIJ KIR RMI FSM NAU PAL PNG SAM SOL TIM TON TUV VAN
NZ AUS AUS US US AUS US AUS AUS AUS AUS AUS JPN AUS
AUS JAP JPN JPN JPN JPN JPN EU JPN NZ PORT JPN AUS US
GEF EU NZ EU EU EU EU GLF EU JPN US NZ NZ JPN
ADF NZ EU AUS ADF NZ ADF NZ NZ EU JPN ADF ADF NZ
UNTA UNDP GEF GEF AUS TUR AUS JPN ADF ADF EU IDA EU FRA
EU GEF ADF TUR TUR SWI TUR ADF IMF IDA SPN US TUR EU
JPN US US ADF NZ GEF GER IDA IDA GEF IRE GEF GEF GEF
UNDP KOR KOR NZ GEF UNTA UK GEF GEF GAVI NOR EU KOR CAN
CAN FRA GAVI UNTA GER ADF GEF UNDP US CAN GER TUR CAN ADF
UNFPA CAN GER UNTA KOR KOR GER ARAB ITA SWE UNTA SWI UNTA
ADF = Asian Development Fund, ARAB = Arab agencies, AUS = Australia, CAN= Canada, EU = European Union institutions, COO = Cook Islands,
FIJ = Fiji Islands, FRA = France, FSM = Federated States of Micronesia, GAVI = Global Alliance for Vaccines/Immunization, GEF = Global Environment Facility,
GER = Germany, GLF = Global Fund, IDA = International Development Association, IMF = International Monetary Fund, IRE = Ireland, ITA = Italy, JPN = Japan,
KIR = Kiribati, KOR = Republic of Korea, NAU = Nauru, NOR = Norway, NZ = New Zealand, PAL = Palau, PNG = Papua New Guinea, RMI = Republic of Marshall
Islands, SAM = Samoa, SOL = Solomon Islands, SPN = Spain, SWE = Sweden, SWI = Switzerland, TIM = Timor-Leste, TUR = Turkey, TUV = Tuvalu,
UNFPA = United Nations Population Fund, UNTA = United Nations Regular Programme for Technical Assistance, US = United States, VAN = Vanuatu.
Notes: In descending order by disbursement levels; includes only those entities that are in the Organisation for Economic Co-operation and Development
(OECD) Query Wizard for International Development Statistics (QWIDS) database. Only nine donors were included for the Cook Islands in the OECD database.
Source: OECD QWIDS. http://stats.oecd.org/qwids/ (accessed 10 June 2011).
Learning Lessons
Learning Lessons Learning Lessons
for 96 advisory technical assistance projects classifed under
public sector management. These projects supported major
public sector reform programs as well as smaller and more
targeted reform and capacity building eforts in such areas as
state-owned enterprises, civil service, land reform, and public
fnancial management. ADB has also supported numerous
sector- specifc projects and regional technical assistance
with governance and institution building components.
Assessing ADBs support
The evaluation rated ADBs support overall for the
governance thematic area as partly successful, just below the
threshold for successful. This overall rating refects relatively
high scores on relevance and strategic positioning, and
relatively low scores in all other rated areas.
ADBs overall strategic positioning is assessed as satisfactory,
with potential improvement in such areas as governance
risk assessments. ADB support is assessed as relevant, in that
loans/grants and technical assistance projects were generally
aligned with country needs and considered country contexts.
The study found public sector management interventions
to be less efective, less efcient, less likely to be sustainable,
and partly satisfactory in impact, all of which are the second
lowest tier in the four-tier rating system. Many projects
did not achieve important stated outputs and outcomes,
limiting overall efectiveness and impact. Delayed consultant
recruitment, weak counterpart support, and changes in
project scope were among the many factors contributing to
weak efectiveness and efciency. Many project achievements
were not sustained over time and a number of key institutions
supported by these projects remain signifcantly challenged
today, leading to low sustainability ratings. ADBs overall
contribution to development impact with respect to public
sector management interventions is assessed as
partly satisfactory.
Whereas the evaluation found only a limited ADB
contribution to country achievements in good governance,
the evaluation acknowledged the difculty of governance
reforms and of working in the Pacifc. Governance reforms, by
their very nature, are incremental and require signifcant time,
even when support is of high quality and especially in fragile
states. Moreover, in most of the Pacifc developing member
countries, the scale of ADB governance support, in absolute
terms and relative to other donors, has been limited.
A Few Lessons
A more congested aid and development landscape
requires better coordination and capacity. While more
aid from more providers brings additional resources and
opportunities for development, it also raises the risk of
poor coordination and fragmentation. The Pacifc countries
and their key development partners have tried to improve
coordination, but many still consider this a major weakness.
For ADB, this more congested environment requires
continued partnership building with traditional and, possibly,
non-traditional partners; more efective leveraging of its
limited resources; and a sharper focus on areas where it has
clear comparative advantage and a history of success.
For example, ADB has an advantage and adds value by
conducting and publishing investigative studies into
important development issues in the Pacifc. The Pacifc
Department has supported a number of region-wide,
thematic, and country-specifc analyses, including high-
profle economic reports for a number of countries. Strategies
to manage this knowledge more efectively and improve
its visibility and utility in Pacifc policy arenas could be
considered.
State-owned enterprise reform is another area that has been
a relatively consistent focus of ADB support over the decade,
with some encouraging signs in this particular area of public
sector management reform.
Follow-up support, less complexity, and project designs
that incorporate nuances of local culture and political
economy help improve project efectiveness. While the
evaluation found ADBs support, overall, to be less efective,
there were clear examples of projects achieving their
objectives. Projects supported over an extended period that
were less complex and that considered local cultural and
political-economy factors were generally more efective.
Thematic and sectoral diagnostics helped to identify
and achieve project objectives, as did dissemination of
information and follow-up technical assistance. Follow-up
support for state-owned enterprise reforms, as mentioned
earlier, is one example.
Broad-target reforms are less efective. The evaluation
found that broader and often more ambitious reforms, such
as those embedded in many of the program loans, were less
efective. Weak institutions, shifting priorities, and myriad
other factors complicated and challenged eforts to bring
about broader, systemic improvements in governance.
Joint diagnostics are useful. Collaborative work with other
development partners, through regional technical assistance
and other modalities, promoted harmonization and improved
coordination. For example, ADB collaborated with the
Australian Agency for International Development and other
partners in conducting Public Expenditure and Financial
Accountability exercises in several countries. Collaboration
within ADB was also found to be useful. Recent joint work
between the Central Operations Services Ofce and the
Pacifc Department on the procurement review for efective
implementation is one example.
Learning Lessons
Recommendations
Shift emphasis from broad-scope policy lending to
longer-term, sector-development programs that support
priority sectors to enable lasting governance outcomes.
To encourage sustained engagement rather than dispersed
eforts, future public sector management interventions
should have a narrower and more direct link to achieving
the objectives of operational priorities. It would be useful
to focus policy-based lending and policy actions to support
ADBs priority sectors unless the country context specifcally
necessitates core policy reforms at the national level. Also, it
is appropriate to continue to focus technical assistance at the
line-agency level, to target key weaknesses in procurement,
audit, monitoring and evaluation, and to develop country
systems and safeguards with a view to strengthening ADBs
priority sectors and line-agency service delivery. ADB must be
prepared to stay engaged using appropriate public fnancial
management tools in key sectors for long periods.
Strengthen partnerships and collaboration to address
core, national governance outcomes. ADB can widen
and strengthen its partnerships to achieve development
results. Externally, ADB can institutionalize joint work in
key public fnancial management areas (including Public
Expenditure and Financial Accountability assessments) to
build national governance capacity; continue joint work with
bilateral partners on country-level economic and governance
diagnostics; intensify eforts to strengthen procurement; and
provide targeted support to key accountability institutions.
Internally, ADB can improve stakeholder access to its own
knowledge products and develop a work program to identify
key development and implementation issues that will be
pursued jointly with service and knowledge departments.
Explore non-traditional approaches to enhance
transparency and participation in Pacifc countries to
sustain improvements in governance eforts and their
impact on development efectiveness. Non-traditional
approaches, of course, can include new partnerships with
non-traditional ADB partners, or new modalities of providing
support for governance. ADB may consider supporting more
university-based research and policy study institutions to
generate locally-derived knowledge and ideas in support
of good governance. It may also look at working with civil
society groups in building expertise to monitor public
service delivery, and promote the institutionalization of
policy forums and development partner consultative group
meetings. ADB is encouraged to continue its Pacifc-focused
studies and analyses on important development issues
(including governance-related topics), and develop strategies
to better manage this knowledge and improve its visibility
and usefulness in Pacifc policy arenas.
Improve the capacity of institutions responsible
for statistics to improve monitoring of progress on
governance eforts and other development initiatives.
Wide gaps remain in information relating to development
results, including Millennium Development Goal indicators.
ADB has supported eforts to improve statistics capacity
and is encouraged to continue its work with partners to
address this long-standing challenge. A closer analysis
may be warranted to identify more efective strategies for
strengthening statistics capacity in the Pacifc countries.
Reference
IED. 2011. Special Evaluation Study on Asian Development Banks Support for Promoting Good Governance in Pacifc Developing
Member Countries. Manila:ADB. Available online at www.adb.org/documents/adb-support-promoting-good-governance-
pacifc-developing-member-countries
Learning Lessons
Learning Lessons is a synthesis of key evaluative lessons drawn
from the experience of ADB operations and non-ADB sources.
Lessons presented in this brief are not prescriptive, and users are
advised to carefully review these lessons in the context of country,
sector, and thematic conditions.

Contact Us
Independent Evaluation Department
Asian Development Bank
6 ADB Avenue, Mandaluyong City
1550 Metro Manila, Philippines
Tel +63 2 632 4100
Fax +63 2 636 2161
www.adb.org/evaluation
evaluation@adb.org
Written by Ben Graham and Hemamala Hettige under the guidance of Vinod
Thomas, Director General, Independent Evaluation.
Disclaimer
The views and assessments contained herein do not necessarily reect the
views of the Asian Development Bank (ADB) or its Board of Directors or the
governments they represent. ADB does not guarantee the accuracy of the
data and accepts no responsibility for any consequence of their use.
About the Independent Evaluation at Asian Development Bank
The Independent Evaluation Department evaluates the policies, strategies,
operations, and special concerns of the Asian Development Bank
relating to organizational and operational eectiveness. It contributes to
development eectiveness by providing feedback on performance and
through evaluation lessons.